Labour nationalisation plans "will scare off foreign investors" - CBI boss

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The leader of the country’s largest business organisation has called on the Labour Party to abandon “outdated ideologies” and warn that its plans for nationalisation of major industries will scare off foreign investors and harm savers and pensioners.

Responding to Labour leader Jeremy Corbyn’s speech at the CBI’s annual conference in London, its director general Carolyn Fairbairn called on his party to accept business as the provider of opportunities rather than “root cause of inequality”.

Boris Johnson's plans for business rates are under scrutiny - Getty Images picture

Boris Johnson's plans for business rates are under scrutiny - Getty Images picture

Mr Corbyn used his address to business leaders to say that it was “nonsense” to call him anti-business, while announcing plans for 320,000 climate apprentices and to allow local authorities to take control of local bus operators if the wish to.

However Ms Fairbairn said follow his speech: “It’s time to see Labour open the door to real and lasting partnership with business, not stick with outdated ideologies that would close it in their face.

“The challenge is not what Labour want to achieve, it’s how. Firms share many of the same ambitions, on skills, climate change, delivering high paid jobs and making sure that the proceeds of growth are felt across the country – but those challenges need a joint response.”

The CBI boss said that many of Labour’s proposals showed promise but simultaneously railed against what she called the party’s “false instincts for mass nationalisations and forcing inclusive ownership schemes onto thriving businesses” - plans she said would “frighten off investors from backing the UK, with pensioners and savers having to foot the bill”.

Carolyn Fairbairn - Picture from Getty Images

Carolyn Fairbairn - Picture from Getty Images

All three main parties spoke at the CBI’s conference, with Prime Minister Boris Johnson having pledged a review of the business rates system.

The pledge was welcomed by Helen Dickinson, Chief Executive of the British Retail Consortium, but she warned that it would ultimately not slow the decline seen on many of Britain’s high streets.

She said: “The Conservatives should commit to supporting investment and growth in retailers large and small, particularly as the majority of the UK’s 3 million retail workers are employed in businesses that will not benefit from the proposed rates cuts.”

The Prime Minister also pledged to shelve a planned reduction in corporation taxes, vowing to spend the money on public services.

Jeremy Corbyn

Jeremy Corbyn

However the CBI said this would only work for the country if “it is backed by further efforts to the costs of doing business and promote growth”.

Liberal Democrat leader Jo Swinson used her speech to promise improvements to tackling climate change and improving skills, as well as replace the business rate system with a landowner levy.

However the CBI warned that such a land value tax would be “mired in complexity” and that it was not clear how such a charge would produce a level playing field for business.

It did, nonetheless, welcome the commitment to better infrastructure to connect the UK’s regions and nations, as well as on closing productivity gaps and facilitating a step change in exports.